Lessons Learned

1
Lessons Learned

• A-76 Financial Services Study
• February 12, 2004

2
Performance Work Statement (PWS) Issues

• Adequate resources including time and personnel
  must be dedicated to write PWS
• Active procurement involvement required from
  inception
• Majority of our consultants A-76 experience was
  with DOD and lacked relevancy in some areas
• Scope of work and any underlying assumptions must
  be clearly defined and understood before
  beginning to draft PWS
• Conference call with sites under study to discuss
  workload collection methodology to improve
  consistency of data collected

3
Request for Proposal (RFP) Issues

• Potential major reorganization/consolidation
• Change in technology (DISCAS to STARS)
• Disconnect between the work scope and workload
  information
• Timeline conflict STARS implementation vs A-76
  Study
• Not providing property and facilities
• Location(s) not given Created problem with
  Service Contract Act (See Section L.23(i) on page
  L-13 of the RFP)
• Payroll Outsourcing to DFAS in process during
  solicitation
• Sites and Information Technology in and out of
  study

4
RFP Issues

• Clauses M.2 and M.3 written for A-76
• (See Section M on page M-2 of the RFP)
• M.2 OMB CIRCULAR A-76
• This solicitation is a Public-Private
  Competition under OMB Circular A-76 (Revised) May
  29, 2003, Performance of Commercial Activities
  and the FAR. Upon completion of the cost
  comparison, a best value determination will be
  made. If the result of the best value
  determination favors Agency performance, this
  solicitation will be cancelled and no contract
  will be awarded.
• M.3 BASIS OF CONTRACT AWARD
• If the result of the evaluation favors
  performance under contract, the Government
  anticipates the award of a contract to the
  responsible offeror whose proposal is responsive
  to the solicitation and is determined to be the
  best value to the Government. Selection of the
  best value to the Government will be achieved
  through a process to select the offer by
  evaluating and comparing proposals including the
  Agency submission in accordance with evaluation
  criteria in addition to the evaluated probable
  cost and fee. The technical and business
  management criteria are approximately equal in
  weight to cost. A best value decision reflects
  the Governments willingness to accept other than
  the lowest probable cost and fee if the perceived
  benefits of the offer with the higher cost and
  fee merit the additional cost and fee.

5
RFP Issues

• Announcements should be coordinated through SEB
  and their legal advisor (OMB Circular Attachment
  B, Section D.6 on page B-17)
• Public announcements
• Personnel briefings

6
Issues with OMB Circular A-76dated May 29, 2003

• The circular should be modified to require
  inclusion of procurement and legal
  representatives during the development and
  submission of the Agency proposal.

7
Issues with OMB Circular A-76dated May 29, 2003

• Inadequate Commercial Proposals - CSO Decision
• Attachment B, Section D.4.d. on page B-12
  requires the MEO proposal to remain sealed until
  a review is completed of all commercial proposals
  to determine whether a commercial proposal is
  suitable for inclusion in the competitive range.
  Under the debriefing rules in the FAR, those
  commercial offerors are required to be given a
  debriefing. In a situation where all of the
  commercial proposals are rejected and do not make
  the competitive range, and the CSO makes a
  determination that the procurement should be
  cancelled, re-solicited, or amended to resolve
  deficiencies, then the government is required by
  the FAR to debrief the commercial firms. The
  agency submission must be returned sealed.
  Therefore, debriefing of the Agency is not
  allowed regarding the MEO proposal at the time
  other Offerors are debriefed. Consequently, the
  agency is placed in a serious disadvantage in any
  re-competition process. We believe this is a
  fundamental flaw in the OMB circular that needs
  to be addressed.

8
Issues with OMB Circular A-76dated May 29, 2003

• Inadequate Commercial Proposals Agency Proposal
• In the situation where there are no acceptable
  commercial proposals for inclusion in the
  competitive range and the CSO determines to
  implement the Agency proposal, it is conceivable
  that the Agency submission could be technically
  inferior and more costly than commercial firms
  that were eliminated from further consideration.
  Consequently, the government is faced with having
  to fix the agency submission to the detriment
  of the offerors that were eliminated. (Refer to
  Attachment B, Section D.4.d. on page B-12)

9
Issues with OMB Circular A-76dated May 29, 2003

• Evaluation Factors
• Attachment B, Sections D.3.a.(3)(a) and (4) on
  page B-8 lists personnel qualifications as an
  example of one of the items to be included as an
  evaluation factor. Upon trying to implement this
  evaluation factor by requiring the agency to
  provide personnel resumes in the same manner as
  required of the commercial firms, the SEB was
  informed that it is not feasible or practical for
  the agency to comply with these requirements
  because of statutory restrictions. By not being
  able to evaluate personnel qualifications, along
  with such items as past performance, small
  business plans, etc., it becomes extremely
  difficult to maintain a level playing field in
  the evaluation process. The points normally
  assigned to these criteria constitute a
  significant portion of the total available
  points. A neutral rating was assigned to these
  criteria for our solicitation.

10
Issues with OMB Circular A-76dated May 29, 2003

• Corporate Commitment
• Can the senior officials within the respective
  departments or agencies write letters of
  endorsement and commitment on behalf of the MEO
  or are they prohibited due to the firewall which
  was established to avoid the conflict of
  interest? (i.e., Should A-76 cost studies
  continue to use corporate commitment as an
  evaluation criterion?)

11
Issues with OMB Circular A-76dated May 29, 2003

• Limitations on Discussions with MEO
• Attachment B, Section D.5.c.(2) on page B-15
  includes a requirement to limit discussions with
  the agency to writing only. This requirement is
  another instance where the playing field is not
  level in the evaluation process. Furthermore, it
  is a major impediment to having effective
  dialogue between the SEB and the agency
  concerning deficiencies within the agency
  submission and needs to be corrected.

12
Issues with OMB Circular A-76dated May 29, 2003

• Mode of Contracting
• The policy established by Attachment B, Sections
  D.3.a.(3)(b) on page B-8 and D.5.b.(3) on page
  B-14 to restrict the use of Best Value is not in
  the best interest of government contracting. The
  best value contracting process is clearly
  established as an acceptable form of government
  contracting in FAR Section 15 and is highly used
  throughout the government. The mode of
  contracting should be left to the discretion of
  the program managers and procurement
  professionals responsible for managing the
  various agency budgets.

13
Issues with OMB Circular A-76dated May 29, 2003

• Return of Sealed Agency Proposal
• Attachment B, Section D.4.d (2)(a) on page B-12
  requires the CO to return the sealed agency
  proposal to the ATO. It is a requirement within
  DOE and other agencies that all proposals be
  submitted electronically. It is not possible to
  return a sealed electronic proposal. (If the
  need arose, it was the intent of the SEB to
  download the MEO proposal putting a cover letter
  explaining it was being returned unopened in
  order to comply with the OMB policy.)

14
Issues with OMB Circular A-76dated May 29, 2003

• Baseline Costs
• Attachment B, Section A.4. on page B-1 requires
  baseline costs to be determined during the
  preliminary planning process. However, the
  circular does not define what constitutes a
  baseline. In addition, the circular does not
  provide guidance for computing a baseline and
  does not indicate how it will be used. This may
  result in inconsistent implementation within and
  across agencies and departments.

15
Issues with OMB Circular A-76dated May 29, 2003

• Identify Savings
• Item 5.e on page 2 of the circular states that
  the CSO shall identify savings resulting from
  completed competitions in accordance with OMB
  Circular No. A-11. However, Circular A-11
  does not currently provide instructions for
  computing or reporting these savings.

16
Issues with OMB Circular A-76dated May 29, 2003

• Letter of Obligation
• Attachment B, Section D.6.f (3) on page B-18
  requires the CO to establish an MEO letter of
  obligation with an official responsible for the
  performance of the MEO. There is presently no
  guidance for preparing such an instrument. It is
  our recommendation that each Agencys Office of
  Procurement Policy prepare an example of an MEO
  letter of obligation for inclusion in their
  acquisition guidance.

17
Issues with OMB Circular A-76dated May 29, 2003

• MEO Contracting
• The OMB Circular A-76 should be clarified in
  regards to the MEO contacting private
  corporations for purposes of forming teaming
  arrangements, negotiating prime contracts for
  performance of the work statement (e.g., can this
  be done without using normal government
  procurement process to obtain such prime
  contracts), and obtaining cost and pricing data
  (e.g., labor and indirect cost rates). Should
  the MEO use existing rates of current contract
  without directly contacting company or should
  they develop an average rate based on a market
  survey for these services?

18
Issues with OMB Circular A-76dated May 29, 2003

• Phase-In Plan
• The OMB Circular (pages B-2, B-10, D-4, D-8)
  attempts to distinguish between Phase-in plan
  and Transition Plan. In the commercial world
  of government contracting no such distinction is
  made. This creates major confusion and
  difficulty with the MEO submission when the
  solicitation only addresses the phase-in or the
  transition plan. The OMB Circular should be
  modified.

19
Issues with OMB Circular A-76dated May 29, 2003

• Employee Representative
• The Circular on page D-4 (see also pages B-18
  B-20) defines that a single individual can be
  appointed by a majority of directly affected
  employees as their agent and this individual
  would be a directly interested party. The
  Circular does not define how to set up the
  mechanism to select this individual or who has
  the responsibility for assuring that this
  individual is selected. For competitions that
  only affect one site, this issue may be
  manageable. However, where there are multiple
  sites, the issue of selecting a single individual
  to represent all affected employees becomes much
  more difficult. This process could involve some
  significant difficulties in dealing with multiple
  unions.
• A suggested solution may be to appoint someone
  within the OMB designation of officials, such as
  the CSO or HRA, to take ownership of this
  process. The consequence of not selecting an
  agent to represent the employees at the inception
  of the competition could potentially result in a
  sustainable protest due to a procedural flaw
  within the process.

20
Issues with OMB Circular A-76dated May 29, 2003

• Agency Terminations
• The Circular on page B-20 (E.6. Terminations)
  requires the MEO or other public service provider
  be treated, for termination purposes, as any
  commercial provider in accordance with FAR Part
  49. The questions which arise as a result of
  this requirement are
• 1) Will the MEO or other public service
  providers be given the same access to an
  Agencys Board of Contract Appeals and/or the
  Federal court for resolution of disputes or
  terminations under the Contract Disputes Act?
  Will there be other options available to the MEO
  for resolving disputes that may arise?
• 2) Are Federal agencies prepared to
  terminate a part of their own organizations? If
  termination occurs, how will the agencies
  resolve personnel issues?

21
Human Resource Issues

• Adequate and dedicated resources should be
  provided to all teams (PWS, SEB, and MEO)
• ATO should have major responsibilities not only
  for drafting the MEO proposal but also for
  implementing and achieving the desired results
  after award.
• When firewalls are established, steps should be
  taken to ensure that the proper level of
  management has access to the ATO and MEO Team.

22
Overview

• Suggest many modifications to the revised OMB
  Circular A-76, dated May 29, 2003
• Limit reorganization and consolidation for
  A-76 Studies
• Clearly define Statement of Work, i.e. systems,
  technology, etc.
• Adequate resources and skill mix to perform study